(Bloomberg) -- Germany’s DAX Index hit a fresh record as it rebounds from a selloff earlier in August amid optimism about the path of interest rates.
The benchmark gained as much as 0.8% on Thursday, reaching 18,936.04 points and topping its previous peak of May 15.
The DAX is up 13% so far this year, making it one of the best-performing main Western European indexes with Italy, and by far outdoing France’s CAC 40 Index, which is only slightly higher this year. The pan-European Stoxx 600 Index is up over 9%.
“Germany is once again proving to be European stock markets’ hidden champion,” said Aneeka Gupta, director of macroeconomic research at WisdomTree. “Industry-specific drivers may have resulted in its outperformance given the larger weight of growth stocks,” she added.
Siemens Energy AG and Rheinmetall AG are among the biggest gainers in Germany’s benchmark index in 2024, rising 110% and 89%, respectively. Meanwhile, SAP SE — the biggest company by market value on the DAX — advanced 42% amid a global rally in technology stocks.
Risks still linger for German stocks. Bloomberg Intelligence strategists earlier this week said the DAX Index could struggle to bounce further for the rest of the year, weighed down by a slowing Chinese economy and tepid European recovery. For now, investors are overlooking these concerns on hopes that European Central Bank rate cuts will benefit the market.
“Receding fears about an imminent US recession and geopolitical escalation as well as positive idiosyncratic developments of some heavily weighted stocks appear to be the main drivers behind the recent performance of the DAX,” said Maximilian Kunkel, chief investment officer for Germany at UBS Group AG.
Now the DAX has regained its record high, attention will turn to the Stoxx 600 and the UK’s FTSE 100, which are also near their peaks.
--With assistance from Sagarika Jaisinghani.
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